What Lurks Beneath? A Tectonic Shift in the Work Arrangement Landscape?

Earthquakes occur when sufficient stress has built up along fault lines, such that the earth moves all of a sudden, and what’s on the surface is often drastically altered. Things in our 21st century world are now happening so quickly that we rarely pause to examine what changes actually occurred and how those changes overtook us (they often come quietly from behind).

Just over the past 20 years, we have known many such instances. One of the most visible ones (you can think of all the rest!) was the advent of iTunes. Prior to that, we were all very comfortable with our time-tested way of consuming music: we would own our own player devices (phonograph, Walkman, CD player) and we would buy our music on some corresponding physical medium (vinyl, cassette, CD containing the IP/content we desired) from some retail outlet (first a physical store and eventually an online store like Amazon.com).

Even as digitization set in, this old pattern or form of arranging access to musical content we did not own — but could pay to use — did not change right away. But at some point — after internet, MP3 technology, and Napster — it did (rapidly and completely). At some point, technology, economic forces, human behavior shifts brought about a major shift — not some major discontinuity or leap in underlying technologies or a suspension of the laws of supply and demand (or laws of intellectual property, for that matter), but a substantial change in how access to music was structured or arranged.

So is such a shift possible in the world of “work arrangements?”

Until quite recently, human capital-related information technology (including HCM and TMS) has not had much impact on the shape of “work arrangements.” Job Boards did not change the form of the traditional permanent employment work arrangement, and Vendor Management Systems (VMS) did not change the form of the traditional contingent/temporary/SOW work arrangements. Both of these information technology developments basically targeted improvements in talent supply chain performance, not the “restructuring” of actual “work arrangements.”

However, over the past six years, a set of forces has been converging (these include, increasing global economic competitive pressures, businesses requiring more flexible workforces and scarce talent, and changes in workforce demographics, expectations, and preferences). These forces, mixed with new possibilities engendered by integration of technologies like social, cloud, mobile, et al, have been having significant impacts on work arrangements (actually spawning new forms). Perhaps one of the most radical of these has been “crowdsourcing” work arrangements, while one of the most pervasive has been “online freelancing” enabled by online staffing platforms like oDesk, Elance, and others. Concepts of “extended workforce” (Accenture), “private talent clouds” (Elance), “workforce-as-a-service” (OnForce) are now not just fantastic ideas, but in 2013 refer to functioning “work arrangements” that have unprecedented characteristics of being fractional, variable, mobile, on demand, etc.

SIA started studying this phenomenon over the past two years, and we continue seeing clear signs of development, innovation, and growth--in what today still looks like a small spot in a petri dish. Some of these visible signs can viewed through the microscopes of two recent SIA reports, The “Human Cloud” in 2013: What It Is, and Why It Is An Emerging and Real Opportunity For Staffing Firms and “Online Staffing” Platforms: 2013 industry segment landscape.

In just the Online Staffing category alone--not counting Crowdsourcing or Online Services firms-- there are at least 67 firms, and almost 50% of them have been started in just the last three years. These firms are becoming more and more diverse as they innovate and try new “work-arrangement” models. This diversity and innovation, as well as observed growth in utilization of these platforms and a lots of room for penetration of non-traditional staffing markets, has just this week led us to update our 2013-2014 forecasted growth rates of spend on Online Staffing platforms to 60% and 70% respectively.

Some argue that these platforms have so far operated under the radar of regulatory oversight and legal and tax compliance requirements, and that these issues will either slow this growth or even bring this new “human cloud” industry segment to its knees. However, one can look at this differently: these digital platforms could, with further adaptation, actually enable unprecedented regulatory over sight and even automatic compliance processing that cannot occur in the traditional supply chain. One can also point out that Napster was a precursor to iTunes, but it did not stop “online music access arrangements” from happening.

Returning to the fundamental question here: Massive change and shifts are not always predictable based on what we easily observe—especially when information technology is involved. So can we ask ourselves if what we widely observe today will allow us to predict the extent to which work arrangements may change over the next two to five years. Or should we concern ourselves with processes that may be lurking underneath?


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